Adelaide

Nearly AUD 30 million of local commercial property sold or under contract to Adelaide-based private investors since August 2013: Jones Lang LaSalle

2013-09-16T05:00:00Z

With few opportunities for passive, secure investment in the market up until recently, Adelaide-based private investors have snapped up stock in the past six weeks

ADELAIDE, 16 September, 2013 – The Adelaide market has had few opportunities for passive, secure investments until recently, when several long-awaited opportunities appeared on the market and were quickly snapped up by local private investors.

According to Jones Lang LaSalle’s Lukas Weeks, Senior Negotiator for Sales & Investments, SA, activity is picking up in the Adelaide market.

“We are seeing pent-up demand from purchasers – particularly those with significant cash on deposit. The low-interest rate environment is offering a really attractive spread between yield and cost of funds, and as a result a strong appetite for investment in commercial real estate by private investors has outstripped supply in Adelaide,” said Mr Weeks.

Mr Weeks said the AUD 30 million of properties transacted in Adelaide in the past six weeks – managed by Jones Lang LaSalle – were highly sought after as they provided an ideal proposition, ticking the boxes for investors.

The largest of the properties sold by Jones Lang LaSalle since August was a 3,300 square metre office building at 70 Light Square in Adelaide. The property sold for AUD 14.5 million with a yield of 8.8% in September to two local private investors, following a campaign that generated over 50 enquiries. The premises’ anchor tenant is URS, with an approximate 4.5 year Weighted Average Lease Expiry (WALE).

“The level of interest in 70 Light Square was really encouraging. While we saw interest from overseas groups, syndicators and national groups, the depth of interest from local private investors is testament to the amount of money either held on deposit or available as equity in portfolios. To present an unconditional offer with 30 days settlement at over AUD 4,500 per square metre to the vendor demonstrates the competitive nature of the campaign and the strong demand for these types of assets,” concluded Mr Weeks.​